The Impact of Government Expenditure on Economic Growth: The Nigerian Evidence, (1981-2012).

Nwaogwugwu, I.C (2015)

Staff Publications


This article investigates the impact of government expenditure on economic growth in Nigeria over a period of 1981-2012. Using descriptive statistics, Trends and Econometrics method (VAR and VECM), it found that capital expenditure showed a negative relationship to economic growth in the short term, while recurrent expenditure showed a positive relationship on economic growth both in the short and long term. It also found that the rate of adjustment to equilibrium in case of disequilibrium is small. That is, less than 15per cent. The policy suggestion from the study is that government should put up stricter measures to make sure that funds approved for capita! projects are thus used in carrying out the project while productiveness of recurrent spending should be stepped up.